FDD Items 3 & 4 · 2026 filing

Line-X litigation history

What Line-X disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 22; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2026; Disclosures cover the prior ten years

Extracted from the 2026 Franchise Disclosure Document

Item 3: litigation

Extensive litigation primarily related to System Conversion from commission-based to royalty-based model; most cases involve non-compete enforceability disputes from franchisees who did not join the new system; majority have reached settlements in principle

Item 3 (litigation) · 22 matters disclosed · 11 pending listed

Litigation cases

The franchisor

Pending (10)

14/69 Carwash Supercenter LLC, 14369 Carwash LLC, and Matt Bennett v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2024-01-17 · American Arbitration Association · 01-24-0000-2214
“… Case No. 01-24-0000-2214, American Arbitration Association, filed January 17, 2024.”Page 17 of the 2026 FDD, Item 3
Outcome: “14/69 Carwash Supercenter LLC, 14369 Carwash LLC, and Matt Bennett (collectively, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non-compete provision in Claimants’ franchise agreement; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provision; and their related attorneys’ fees and costs. LINE-X filed an answer and ...”
Big D’s Motorsports LLC, Joshua Berg, and Daniel Kraussman v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2024-01-12 · American Arbitration Association · 01-24-0000-1728 (the same number the filing also prints for LINE-X of Troy LLC on PDF page 18; see count_note)
“Big D’s Motorsports LLC, Joshua Berg, and Daniel Kraussman v. LINE-X LLC as successor- in-interest to LINE-X Franchising LLC, Case No. 01-24-0000-1728, American Arbitration Association, filed January 12, 2024.”Page 16 of the 2026 FDD, Item 3
LINE-X of Troy LLC fka Keith Cooper LLC and Keith Cooper v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2024-01-12 · American Arbitration Association · 01-24-0000-1728 (the same number the filing also prints for Big D’s Motorsports LLC on PDF page 16; see count_note)
“LINE-X of Troy LLC fka Keith Cooper LLC and Keith Cooper v. LINE-X LLC as successor-in- interest to LINE-X Franchising LLC, Case No. 01-24-0000-1728, American Arbitration Association, filed January 12, 2024.”Page 18 of the 2026 FDD, Item 3
Outcome: “LINE-X of Troy LLC fka Keith Cooper LLC and Keith Cooper (together, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non- compete provision in Claimants’ franchise agreement; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provision; and their related attorneys’ fees and costs. LINE-X filed an answer and affirmative ...”
Baker Squared, LLC, David Baker, and Nathonia Baker v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2023-09-21 · American Arbitration Association · 01-23-0004-1874
“Baker Squared, LLC, David Baker, and Nathonia Baker v. LINE-X LLC as successor-in- interest to LINE-X Franchising LLC, Case No. 01-23-0004-1874, American Arbitration Association, filed September 21, 2023.”Page 15 of the 2026 FDD, Item 3
Outcome: “Baker Squared, LLC, David Baker, and Nathonia Baker (collectively, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non- compete provision in Claimants’ franchise agreement; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provision; and their related attorneys’ fees and costs. LINE-X filed an answer and affirmative ...”
Burkholder Truck Sales, LLC, Wilmer Burkholder, and Merlin Oberholzer v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2023-09-21 · American Arbitration Association · 01-23-0004-1882
“… Case No. 01-23-0004-1882, American Arbitration Association, filed September 21, 2023.”Page 15 of the 2026 FDD, Item 3
Outcome: “Burkholder Truck Sales, LLC, Wilmer Burkholder, and Merlin Oberholzer (collectively, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non-compete provisions in Claimants’ franchise agreements; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provisions; and their related attorneys’ fees and costs. LINE-X filed an answer ...”
Darbyshire Coatings, LLC and Benjamin Darbyshire v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2023-09-21 · American Arbitration Association · 01-23-0004-1878
“… Case No. 01-23-0004-1878, American Arbitration Association, filed September 21, 2023.”Page 16 of the 2026 FDD, Item 3
Outcome: “Darbyshire Coatings, LLC and Benjamin Darbyshire (together, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non-compete provision in Claimants’ franchise agreement; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provision; and their related attorneys’ fees and costs. LINE-X filed an answer and affirmative defenses ...”
K&B Accessories, LLC, Kenneth Lind, and Bonnie Lind v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2023-09-21 · American Arbitration Association · 01-23-0004-1880
“K&B Accessories, LLC, Kenneth Lind, and Bonnie Lind v. LINE-X LLC as successor-in- interest to LINE-X Franchising LLC, Case No. 01-23-0004-1880, American Arbitration Association, filed September 21, 2023.”Page 16 of the 2026 FDD, Item 3
Outcome: “K&B Accessories, LLC, Kenneth Lind, and Bonnie Lind (collectively, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non- compete provisions in Claimants’ franchise agreements; a permanent injunction prohibiting LINE-X from enforcing of the non-compete provisions; and their related attorneys’ fees and costs. LINE-X filed an answer and affirmative ...”
LINE-X of Gresham, LLC and Robert Brown v. LINE-X LLC as successor-in-interest to LINE-X Franchising LLC
pending
Brought by a franchisee · filed 2023-09-21 · American Arbitration Association · 01-23-0004-1877
“LINE-X of Gresham, LLC and Robert Brown v. LINE-X LLC as successor-in-interest to LINE- X Franchising LLC, Case No. 01-23-0004-1877, American Arbitration Association, filed September 21, 2023.”Page 15 of the 2026 FDD, Item 3
Outcome: “LINE-X of Gresham, LLC and Robert Brown (together, the “Claimants”) filed an arbitration action against LINE-X seeking: declaratory judgment on the enforceability of the non-compete provision in Claimants’ franchise agreement; a permanent injunction prohibiting LINE-X from enforcing of the non- compete provision; and their related attorneys’ fees and costs. LINE-X filed an answer and affirmative defenses denying ...”
LINE-X LLC as successor-in-interest to LINE-X Franchising LLC v. TNT Coatings, LLC, Robert Levenhagen II, and Mary Levenhagen
pending
Brought by the franchisor · filed 2022-06-21 · American Arbitration Association · 01-22-6002-6360 (printed thus; every other AAA number in this Item uses a 000X block)
“… Case No. 01-22-6002-6360, American Arbitration Association, filed June 21, 2022.”Page 19 of the 2026 FDD, Item 3
Outcome: “LINE-X sought preliminary injunctive relief through an application for emergency measures. Respondents filed an answer and affirmative defenses denying LINE-X’s claims. Although this matter is currently pending, the parties reached a settlement in principle and are completing settlement documents.”
LINE-X LLC as successor-in-interest to LINE-X Franchising LLC v. Tri State LINE-X and Accessories, LLC, Scott Melchi, and Tri State Customs and Offroad, LLC
pending
Brought by the franchisor · filed 2022-03-23 · American Arbitration Association · 01-22-0001-3246
“… Case No. 01-22-0001-3246, American Arbitration Association, filed March 23, 2022.”Page 18 of the 2026 FDD, Item 3
Outcome: “On April 14, 2022, the emergency arbitrator ruled that Respondents were to comply with the post-termination obligations set forth in Paragraph 16.2 and 16.3 of the Franchise Agreement at issue, relating to the intellectual property, confidential information, trade dress and the telephone, other directory listings, and internet sites, but there were disputed facts to be resolved by the merits arbitrator as to the ...”

Concluded (3)

LINE-X LLC as successor-in-interest to LINE-X Franchising LLC v. Douglas W. Ernst dba LINE-X of Cedar Rapids
concluded
Brought by the franchisor · filed 2024-04-30 · American Arbitration Association · 01-24-0004-7015 (the same number the filing also prints for J&D Enterprises Group Inc. on PDF page 20; see count_note)
“… Case No. 01-24-0004-7015, American Arbitration Association, filed April 30, 2024.”Page 22 of the 2026 FDD, Item 3
Outcome: “The Parties resolved this matter. In exchange for Respondent purchasing chemical products from LINE-X for an agreed length of time at an agreed upon price structure, LINE-X allowed Respondent to operate and sell the location as an independent facility after the minimum purchases were met. This action is closed.”
Washington State Order No. S-24-3785-24-CO01, Consent Order, State of Washington Department of Financial Institutions
concluded
Government or regulatory action · filed 2024-11-04 · State of Washington Department of Financial Institutions, Securities Division · S-24-3785-24-CO01
“… (November 4, 2024). On November 4, 2024, LINE-X agreed to the entry of a consent order with the State of Washington Department of Financial Institutions, Securities Division”Page 22 of the 2026 FDD, Item 3
Outcome: “Although LINE-X disputes this finding, the parties mutually resolved the matter by entry of a consent order under which LINE-X agrees to comply with RCW 19.100.020 and pays the Department Two Thousand and 00/100 Dollars ($2,000.00).”
LINE-X LLC as successor-in-interest to LINE-X Franchising LLC v. Trelan Industries LLC and Lance Arrasmith
concluded
Brought by the franchisor · filed 2023-08-23 · American Arbitration Association; and the United States District Court for the Southern District of Iowa, Central Division, on the application to confirm the interim award · 01-23-0003-7296 (American Arbitration Association) and 4:24-cv-00303-SMR-SBJ (S.D. Iowa, Application for Confirmation of
“… Case No. 01-23-0003-7296, American Arbitration Association, filed August 23, 2023.”Page 21 of the 2026 FDD, Item 3
Outcome: “The parties have settled this matter for an exchange for mutual releases and termination of the Franchise Agreement, including the non-competition restrictions, with Respondents agreeing to purchase (ten) 10 sets of chemical product from an affiliate at a set rate or pay LINE-X $8,000.00 per month each month through July 2025.”

Parent, affiliates, master franchisor and subfranchisor

Pending (1)

Joseph Nixon operating as LINE-X of Woodstock v. LINE-X Canada Ltd
pending
LINE-X Canada Ltd. (“LXC”), which Item 1 identifies as a direct subsidiary of the franchisor's former parent and current affiliate IXS Intermediate Holdings LLC, and which itself sells LINE-X franchis · filed 2022-09-14 · Ontario Superior Court of Justice · CV-22-00000170-0000
“… Case No. CV-22- 00000170-0000, Ontario Superior Court of Justice, filed September 14, 2022.”Page 16 of the 2026 FDD, Item 3
Outcome: “LINE-X denies each of Mr. Nixon’s claims. This matter is currently pending.”

Concluded (1)

LINE-X Canada Ltd. v. 1092063 B.C. Ltd., Shane Schorr, and Sheri Schorr
concluded
Brought by the franchisor · LINE-X Canada Ltd. (“LXC”), which Item 1 identifies as a direct subsidiary of the franchisor's former parent and current affiliate IXS Intermediate Holdings LLC, and which itself sells LINE-X franchis · filed 2022-10-04 · Arbitration under the Arbitration Rules of the ADR Institute of Canada Inc. · FZ_2022_1353
“… Case ID FZ_2022_1353, under the Arbitration Rules of the ADR Institute of Canada Inc., filed October 4, 2022.”Page 21 of the 2026 FDD, Item 3
Outcome: “The arbitrator’s award was released on August 15, 2024. The arbitrator found, on the particular facts, that: (i) the non-compete provision in the franchise agreement at issue was unenforceable; (ii) the requirements for breach of confidence were not demonstrated; and (iii) Respondents must cease and desist from identifying themselves as LINE-X and from using the LINE-X trademarks in an unlawful manner in connection ...”

This list shows 15 of the 22 matters Item 3 discloses; the rest are in the filing.

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosure signals that moved the score

How this shows up in the verdict

18 pending litigation actions primarily over non-compete disputes and 2024 system conversion suggests franchisor-franchisee conflict and operational disruption
2024 conversion to royalty-based model appears contentious—multiple lawsuits filed; unclear if new model sustainable

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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